But that’s the good news. We’ll deal with the bad news some other day. Today, we’re going to stick with this good news. People in the developed countries are going to stop thinking so much about GDP, which measures the gross amount of economic activity. Instead, they will be thinking about the quality of it. They’ll switch from thinking about their standard of living, measured in dollars or pounds or euros, and begin worrying more about the quality of their lives. They’ll stop competing to accumulate more than their neighbors; they will want better instead.

First, let’s look at what happened last week…and last quarter. It was the worst quarter for stocks and commodities since 2008. Worldwide, stocks lost 17% — or about $8 trillion. The Dow took a big drop on Friday, ending the quarter just under 11,000. Commodities were hit hard too — with copper surprising the experts by dropping more than they expected. Of course, the experts are always surprised. That’s what makes them experts.

But the fall in copper is significant. Because copper is what producers use to make things. If you make a refrigerator, you need copper. Ditto a telephone. Or an automobile. Or almost anything. So, when copper goes down it sends a message: the economy is slowing down. Most likely, the whole world is slowing down. And the US will be back in recession this quarter. In the last quarter, US GDP growth was clocked at 1.3%. This quarter, it will probably be negative.

Not that it particularly matters. It is probably more accurate to say that the economy never fully came out of the recession of ’07-’08. But no matter from what angle you look at it, the US economy begins to resemble the economy of Japan in the ’90s and ’00s. On-again, off-again recession…with a ZIRP (zero interest rates policy)…low yields…and a government that runs huge deficits in order to keep the economy from dying completely.

Yes, dear reader, the world is a lot poorer than it was in June. But back then people still thought the Bernanke team was engineering a ‘recovery.’ Now we know, recovery hopes were fantasies. This is not an economy that can recover. It has to die. Then, a new economy will take its place.

What will that new economy look like? Here is an article from the Wharton School that helps understand it:

Sandy used to eat lunch out five days a week, indulge in premium cable on-demand and duck regularly into Starbucks for $4 coffees. Then the recession hit, and business at the jewelry boutique she had just opened tanked. By the time she started her YesIAmCheap.com blog in January 2009 as a way to make herself more accountable for her spending, her business had failed and she was $105,665.31 in debt. Today, the 33-year-old New Yorker owes $85,605.73. She packs her lunch, limits movie nights to $1 Redbox videos and mostly opts for coffee from Dunkin’ Donuts — with the occasional splurge for a Starbucks pumpkin spice latte. “They’re small changes but they add up over time,” notes Sandy, who will not divulge her last name but shares the details of her finances online.

Moreover, she says she doesn’t plan to change her spending habits when the economy improves because she has “embraced the cheap.” Although she used to prefer the word “frugal” because she thought it sounded French, “it’s not as negative as it [once was] to be called cheap. It’s almost a badge of honor.”

After more than three years of belt-tightening, the word “cheap” is losing its stigma. Experts at Wharton and elsewhere say the recession has shifted priorities for consumers, who are now more willing to trade quality for a lower price. While some argue that consumers will go back to spending freely as good times return, others say Americans have permanently embraced a cheapskate philosophy, and are unlikely to go back to their spendthrift ways anytime soon.

Many people are also getting back to basics, rethinking what matters in life, and concluding that expensive products may not be worth the cost. Wharton marketing professor Cassie Mogilner, who studies the relationship between time, money and happiness, has found that time is a more “personally meaningful resource” than money for most people.

Our interpretation of these facts…

More is dead. Long live better.

Everywhere we look in the developed world, more no longer pays.

You can’t sell more products, because population growth is slowing…or actually turning negative.

Bigger automobiles are out too — the price of gasoline is rising. For the first 200 years of the machine age, we had the whole world’s energy resources almost to ourselves. They were close at hand…and cheap. Now, they are deep…distant and difficult…and we have to compete with 3 billion people in the emerging markets for them.

You can forget about using more energy to grow your economy. That was the formula for 200 years. But now we’ve passed the point of diminishing returns. More energy inputs — at higher prices — don’t pay.

You can’t spend more money — because you can’t get more. You can’t borrow more either, because you have no way to pay it back.

So, the developed world shifts…from more to better. You can see it clearly here in Europe. People don’t necessarily care about having more stuff. Or more energy. Or even more money. They look for ways to save what they’ve got…and to enjoy it more. They don’t want more house…they want a better house. They don’t want more food…they want better food. They don’t want more money….they want a better quality of life with lots of holidays!

Trouble is, the institutions that have developed over the last 200 years depend on more, not better.

France, for example, can give people longer retirements and more health care, but only when the economy is growing. Otherwise, they can’t afford it. Sure, it can tax the rich. But as taxes rise, the rich flee…or become poor. When that juice is used up, it can tax the future. It’s easy, at first. Because babies don’t vote! But when the supply of babies falls, the government soon runs into trouble. The future runs out of money. Lenders can see what is coming. They know future generations won’t be willing or able to keep up. Then, the model no longer works.

Without growth, governments must cut spending to only what they can raise in taxes. But then, the whole bargain falls apart. Modern government depends on MORE…getting more and more tax revenues…increasing benefits…borrowing more and more money…and spending more. Voters have to believe that they will get more in “benefits” than they pay in taxes. But without growth, they will get less in benefits than they, collectively, pay in taxes. Because government is a wasteful, parasitic enterprise. It doesn’t add to GDP, it subtracts from it. And when GDP is stagnant anyway, the extra drag of a leech government may be more than people will stand.

Households, corporations, economies…and governments…will be forced to make the transition, from more to better. How many of today’s major developed-economy governments will survive in their present form?

Because the USA is the only one that still believes that MORE is the solution to every problem.

The world economy is in a slump. Europe tries austerity. America sticks with more. No serious effort has been made to trim the US government budget. US economists argue for more spending, not less. And Obama’s latest jobs program is merely another spending scam.

The US also has an over-developed confidence in its military forces. Their solution to every geo-political issue? More force…more weapons…more meddling.

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